15th Oct 2014 06:36
LONDON (Alliance News) - Precious metals miner Fresnillo PLC Wednesday raised its 2014 gold production target to take account of its recent acquisition of the whole of its former Penmont joint venture, although third quarter gold production was down on the year due to a stoppage at another mine.
In a statement, the company said it now expects consolidated attributable gold production to be 590,000 ounces in 2014, reflecting the full consolidation of the Penmont assets and temporary disruptions it suffered at the Herradura mine up until March.
Fresnillo earlier this month completed a USD450 million deal to buy Newmont Mining out of the companies' Penmont Joint Venture. It said the acquisition of Newmont's 44% stake would add 2.0 million ounces to reserve and 5.1 million ounces to its resource base, and it increased its 2018 gold production target to 750,000 ounces, from 500,000 ounces, while retaining its 2018 silver production target of 65 million ounces.
Its previous 2014 gold production forecast had been 450,000 attributable ounces.
Fresnillo said attributable gold production decreased 4.4% on the year in the third quarter, primarily due to a stoppage at its Soledad-Dipolos mine, although that was an improvement from the 18.9% decline it had reported for the first half of the year. Production for the first nine months of 2014 is down 14.1% on the year.
It kept its 2014 guidance for 43 million silver ounces, after production in the third quarter was at similar levels to the third quarter of 2013.
"As previously announced, as a result of the Herradura gold production ramp-up combined with the start-up of the new dynamic leaching plant, processing capacity at Herradura needs to be enhanced in order to achieve our long term targets. The impact of work to improve production efficiency is reflected in our 2014 consolidated attributable gold production guidance of 590,000 ounces," Chief Executive Octavio Alvídrez said in a statement.
"We are confident that gold production deferred in the quarter as a result of the works required to improve processing capacity will be made up in 2015 with no effect to our long-term production expectations," he added.
Fresnillo added that it has implemented a one-off phased hedging programme on up to 44% of the Penmont gold production recently acquired to protect investment whilst retaining partial exposure to gold prices. Broader group hedging policy remains unchanged, it said.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Fresnillo